Defence chief information officer Greg Farr expects to ditch the "far from perfect" PeopleSoft human resources system next year in a tender worth around $400 million.

(Credit: Department of Defence)

Farr told ZDNet.com.au that Defence would start the process of replacing its troubled PeopleSoft-based HR system, PMKeys, which was rolled out in 2002.

"Yes. It certainly is something that needs to be on our plate for 2009 ... we're still talking about how we will do that. But there will certainly be something in 2009 which will begin the replacement to our HR system," he said.

However, he also said that the tender's release would depend heavily on the readiness of Defence Support Group, which oversees 4,500 civilian, 1,100 military staff and contractors, and its human resources department, which supports around 110,000 Defence staff.

"I've been talking to the head of our Defence Support Group and the head of Defence HR area, and it seems to me that the drive for process and policy reform needs to be driven very much by them and the IT group supporting them," he said.

"I don't think IT will be the hard part of this," he said.

Defence came under fire from the Australian National Audits Office in 2005 for delays and budget blow outs during the PMKeyS implementation. Farr was still at the Australian Taxation Office at that time, but four months after his appointment at Defence (in November 2007), he said it would be the first major systems replacement project he would undertake in his new role.

"The biggest single project that we have on the books in my realm is going to be the replacement of Defence's HR systems," Farr said at the time. At that stage he did not say when that would commence. And while he said the system was "quite stable" he also said it was "a long way short of perfect".

Farr's leadership style will be put to the test by the HR system replacement — if it goes ahead.

"In my experience the wrong way to look at large HR system projects is as an IT project. It's actually around transformation and the IT to support it. So the way we need to look at our HR replacement is by being business-driven," he said.

On defining requirements for technology procurement generally, Farr said Defence had historically been too slow and over-proscriptive.

"We need to start by being clear on what we want to get... The question I ask internally is, 'OK, we've delivered this project. If this is the best in the universe, what does that look like?' So that we start with that end point," he said.

And if, like the PMKeyS project, the new HR system deployment does go pear-shaped, Farr said he would rather face the music early than cover up failures downstream.

"We also need to recognise that we sometimes get things wrong. I think there is a level of risk aversion — which is why we go through these long processes to avoid risk," he said.

"The best way in my view ... is to get it fielded quickly and cheaply. If it's wrong, admit it's wrong early, and move on rather than trying to justify it."